Which holdings should I reduce first if I want lower volatility?
A risk question asks how much of a portfolio depends on one thing going right — a single position, a sector, a country. Concentration is read as a share of the total, which is what the figures below show.
Worked through on a sample portfolio. The figures below are that portfolio’s, not yours.
I can’t give buy/sell advice. I can show which holdings currently contribute most to portfolio volatility so you can decide.
Below is the volatility contribution of the top holdings (largest contributors first). The table shows each holding and its contribution to portfolio volatility (%) over the last year.
| Asset | Volatility contribution (%) |
|---|---|
| Apple Inc. | 20,90 |
| Microsoft Corp. | 15,98 |
| Deutsche Lufthansa AG | 14,48 |
| iShares Core MSCI World UCITS ETF | 10,69 |
| Bitcoin | 10,40 |
What this means
- These five holdings are the largest drivers of your portfolio’s annualized volatility (portfolio volatility: 8,85% for the period shown).
- A holding’s contribution depends on its weight, its own volatility and how it correlates with the portfolio; higher contribution means it raises portfolio volatility more.
If you want further detail I can show the next contributors, a sector view of volatility, or a scenario that shows portfolio volatility if selected holdings’ volatilities changed.
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Related questions
See this for your own portfolio
The assistant answers the same question about your own holdings, with your figures and today’s prices. Import from your broker, or open the demo portfolio and ask it there.